Government plans 30% salary increase in federal budget 2025-26

As part of the upcoming federal budget, the government is reviewing four proposals to increase the salaries and pensions of public sector employees.

One major proposal suggests a 30% disparity allowance for employees in Basic Pay Scale (BPS) 1 to 16, aiming to reduce income differences across various departments.

Sources in the Ministry of Finance say a 10% increase in both salaries and pensions is also being considered to help employees cope with rising inflation. Another idea is to merge a recent ad hoc relief allowance into the basic pay, giving employees more long-term financial stability.

The disparity reduction allowance is also under review. A 15% increase is proposed for both junior employees (BPS 1 to 16) and senior officers (BPS 17 to 22), ensuring a balanced raise across all government levels.

Another key point being discussed is the exclusion of armed forces from the new contributory pension scheme meant for civilian employees. If approved, military personnel will continue with the traditional pension system.

Government coalition partners have advised Prime Minister Shehbaz Sharif to give a significant salary increase in the new budget, considering the financial stress faced by workers.

The final decision on these changes will be taken in a federal cabinet meeting before the official budget announcement. Public servants across the country are hoping for positive news that will bring some financial relief in these tough economic times.

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